Only You Can Prevent Bad Tax Policy Discussions
But some stuff I come across is so bad, I just can't let it go:
Q. Gov. Phil Murphy wants to raise the tax on incomes over $1 million, but Legislative leaders say they oppose that. Polls show overwhelming support among voters, so what gives on the politics?
DuHaime: New Jersey families are overtaxed, and everyone knows if Trenton is talking about higher taxes, they’re eventually coming for you, too. Our elected leaders are supposed to do what’s right, not just what works in class warfare polling. From a policy perspective, New Jersey is too heavily reliant on our top earners. 1% of the taxpayers pay nearly 40% of the income taxes; 10% of the taxpayers pay nearly 70% of the income taxes. Look what happened when the financial markets nosedived a decade ago. The treasury of New Jersey took a huge hit because we rely so heavily on the highest earners. Finally, those with means can and do move to states, and they take their jobs, their spending, their philanthropy and their families with them. [emphasis mine]We'll leave aside the myth of wealth migration and focus instead on the claim that the state is too reliant on the wealthy for tax revenue. There are at least three major problems with the statement above:
1) You must account for local taxes as well as state taxes in any meaningful analysis of tax burdens.
States vary significantly in what revenues for governmental services are provided by the state or by localities. That's why nearly every credible analysis of tax burdens by state combines local and state taxes.
2) Income taxes are only one source of revenue for the state.
States and localities have a variety of ways to collect revenues: income taxes, sales taxes, property taxes, gas taxes, fees, tolls, etc. Isolating income taxes, which tend to be less CONTINUE READING: Jersey Jazzman: Only You Can Prevent Bad Tax Policy Discussions